Football Club Midtjylland was first established in February 1999, as a result of a merger between Herning Fremad and Ikast Forenede Sportsklubber. The merger was the idea of two businessmen from the area, Johnny Rune and Steen Hessel. The two teams had previously been rivals, but had failed to make a strong impression on the Danish football league. It was believed that the combined club could become a more significant force.

Nicknamed The Wolves, the team began play in the second tier of Denmark's league system, but quickly earned promotion to the SuperLiga in 2000. Along the way, they set a record for the most points amassed in the second tier.

Since reaching the top flight, Midtjylland have established themselves and have emerged as a contender for the country's major domestic honours. In consecutive seasons in 2006–07 and 2007–08, they ended up in second place in the league, finishing behind FC København and AaB, respectively. Then, in 2009-10 and 2010-11, they reached the final of the Danish Cup, but lost on both occasions. As a result of their impressive domestic performances, the team have qualified for the UEFA Cup and UEFA Europa League on multiple occasions. In 2008-09, they beat Manchester City in the first leg of a UEFA Cup tie, but ultimately lost via a penalty shootout after the second leg.

The club have become known for the quality of their youth development, which has resulted from the opening of Denmark's first major football academy in 2004. Denmark international Simon Kjær and New Zealand international Winston Reid are perhaps the two best-known products of the academy. Other notable players to play for Midtjylland include Egyptian striker Mohamed Zidan and Danish defender Simon Poulsen.

Since its opening in 2004, Midtjylland have played their home games at MCH Arena. The stadium is sometimes referred to as Zidan Arena by supporters, after their former player, and is able to hold up to 11,800 spectators.